Transfer price documentation - key practical topics
Transfer price is an important - and often the sole - subject of tax audits in Romania. Adjustments, as well as associated fines and late payment penalties resulting from audits, usually have a significant impact on a company's cash flow.
New legislation on the approval of direct investments
Foreign investments are a key component of Romania’s national economic development. Emergency Ordinance No. 46/2022 (“EO 46”) stipulates an authorization requirement for certain direct and new investments and has been amended several times.
Revaluation of tangible fixed assets
In Romania, the revaluation of fixed assets is regulated by several legal acts, such as the Ordinance of the Minister of Finance No. 1802/2014 regarding accounting regulations for the revaluation of assets, and the Tax Code, which includes, among others, the tax implications of revaluation. The revaluation of fixed assets must be performed by experts registered with the National Association of Authorized Experts in Romania (ANEVAR), in accordance with the applicable legislation. The outcome of this process can help shareholders and company management to develop effective financial strategies and make informed decisions.
Information and consultation of employees - a vague task in Romania
Employees have the right to be informed about facts and developments relevant to their employment. In addition, the employer even has a duty to involve them in company processes and decisions that affect the workforce. The technical term is “information and consultation”. So, what exactly are companies required to do?
AI-Act: use of AI in companies
On June 13th, 2024, the “AI Act” (Regulation (EU) 2024/1689) was published as one of the first regulations worldwide for artificial intelligence (AI) systems. It came into force on August 1st 2024 and will be applied in stages on certain dates (02.02.2025, 02.08.2025, 02.08.2026 and 02.08.2027). The comprehensive AI Act sets a framework aimed at maximizing the benefits of AI while minimizing its risks. Its guiding principles include technical safety, privacy and transparency, fairness, social welfare and accountability. AI should be safe and trustworthy, and its use should guarantee the health, safety and fundamental rights of people as well as ensuring legal certainty for companies in EU member states.
Tax risk assessments - some basics
It is well known that the tax authorities carry out their audits according to an audit plan. The selection of audited companies is based on internal risk analyses by the authorities, taking certain criteria into account. However, these criteria are only defined in the tax authorities' internal working guidelines and are not generally accessible. However, some criteria can be taken from the tax and procedural tax regulations, while others can be logically derived based on the economic assessment of an investment.
Buyer protection for real estate transactions - new rules for developers in sight
In recent years, the Romanian residential real estate market has had its share of problems. Unfair or abusive practices by certain property developers often caused delays in the completion or handover of projects that had already been paid for, resulting in financial losses for buyers. Problems such as requesting substantial advance payments, the lack of adequate guarantees for late delivery, and sometimes the sale of the same property to several buyers are some examples. In response to this, a new law on contractual liability and financial responsibility in preliminary agreements with real estate developers is currently being debated in the Romanian parliament. This is intended to strengthen the legal and financial protection of buyers, particularly in real estate development projects involving condominiums and residential neighborhoods. The aim is to clarify key contractual practices, raise standards of responsibility for developers and ensure a safe and transparent environment for transactions.
ViDA - VAT in the digital age: EU tax reform with significant effects
The European Union is taking a decisive step towards digitalizing the VAT system, with major benefits for SMEs and national budgets. On 11.03.2025, the European legislative package “Value Added Tax in the Digital Age” (ViDA) for the modernization of VAT, received final approval from the Council. It essentially consists of a directive, a regulation and an implementing regulation. The legal acts will generally enter into force within 20 days of publication, followed by a staggered implementation until 2035. The main objectives of the package include improving tax collection, reducing fraud and simplifying VAT compliance for businesses and tax administrations through the use of technology.
Important changes for licenses and operating permits in the energy sector
A new regulation on the granting of licenses and permits in the energy sector, approved by ANRE Order no. 6/12.03.2025 (hereinafter referred to as the “new regulation”), was published in the Romanian Official Gazette on 26 March 2025. This means that all applications for the granting, amendment, suspension or withdrawal of licenses and permits submitted to the ANRE (national regulatory authority in the energy sector), that had not yet been completed before the new regulation came into force, will be examined in accordance with the new regulation.
NEWSFLASH - Updating the Scope of Activity according to CAEN Rev. 3 for all Companies
The Romanian CAEN codes, which must be used to describe the activities carried out by companies in Romania, have been reformed. As of 25 March 2025, there is a 18-month deadline for adapting the CAEN codes declared to the commercial register to the current version (so-called CAEN Rev. 3). The following aspects are relevant in practice: